Contributing Enough Money To Your 401K Plan
If you are making an irregular 401k contribution, then you may want to start using a retirement calculator before you put any more money away for your future.
A retirement calculator can really help you determine the amount of money you need to start saving for retirement. There are many on the Internet that you can use for free. The trick is finding one that will give you the most amount of information.
Some financial calculators only give you a basic idea of what you will need. They do not take into account taxes on your 401K when you withdraw funds, or variability in investment returns over 20 or 30 years. I know you may want a simple answer, but in this case, the more complex the calculator, the better.
Choose your calculator carefully. Being able to see what it will truly take to retire comfortably may be worth it. The alternative is finding out when it's too late that you don't have enough money saved.
Withdrawals and taxes are a major concern at some point in time. After all, that's what you are saving the money for, right? You may find incredibly difficult to do this, but give it your best try. To get you started, assume that taxes will not decrease over time.
Most people realize this, implicitly. Taxes, like death, are said to be unavoidable. Whether or not you believe this, it is probably a good idea to make them part of your financial plan. Consider whether you would value a smaller lump sum of money that is tax free (like a Roth IRA) or if you would rather have a slightly larger nest egg that is 100% taxable (like a traditional IRA).
A retirement calculator can really help you determine the amount of money you need to start saving for retirement. There are many on the Internet that you can use for free. The trick is finding one that will give you the most amount of information.
Some financial calculators only give you a basic idea of what you will need. They do not take into account taxes on your 401K when you withdraw funds, or variability in investment returns over 20 or 30 years. I know you may want a simple answer, but in this case, the more complex the calculator, the better.
Choose your calculator carefully. Being able to see what it will truly take to retire comfortably may be worth it. The alternative is finding out when it's too late that you don't have enough money saved.
Withdrawals and taxes are a major concern at some point in time. After all, that's what you are saving the money for, right? You may find incredibly difficult to do this, but give it your best try. To get you started, assume that taxes will not decrease over time.
Most people realize this, implicitly. Taxes, like death, are said to be unavoidable. Whether or not you believe this, it is probably a good idea to make them part of your financial plan. Consider whether you would value a smaller lump sum of money that is tax free (like a Roth IRA) or if you would rather have a slightly larger nest egg that is 100% taxable (like a traditional IRA).
About the Author:
About the Author: David's expertise is on course personal financial planning for retirement. If you'd like more info, go to twintierfinancial.com.
posted by Credit Counseling at
9:14 AM
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